Generous Benefit Plans Leading Gov’t Employees To Be Nearly 40% More Expensive Than Private Sector
State and local government workers were roughly 40% more expensive to employ than private sector employees in the second quarter of 2024, largely due to generous benefit plans, according to data from the Bureau of Labor…
State and local government workers were roughly 40% more expensive to employ than private sector employees in the second quarter of 2024, largely due to generous benefit plans, according to data from the Bureau of Labor Statistics (BLS) released Tuesday.
Total compensation costs, including wages, salaries and benefits, averaged $43.94 per hour for private sector employees, approximately 40% less than the $61.37 average hourly compensation cost for state and local government workers, according to the BLS data. The disparity was primarily driven by pricey government benefit plans, with costs averaging $13.04 per hour for private industry workers, over 80% less than the $23.57 per hour in benefit costs for their state and local government counterparts.
“These data reflect a clear lack of efficiency in government compared to the private sector, and that’s gotten worse over time,” E.J. Antoni, a research fellow at the Heritage Foundation’s Grover M. Hermann Center for the Federal Budget, told the Daily Caller News Foundation. “One of the large contributors to higher benefit costs for government employees is the bloated pension systems that provide retirement benefits far in excess of what private workers receive. That’s especially true for defined benefit plans, which are so unaffordable that the private sector has nearly entirely transitioned away from them.”